CoinFLEX Begins Arbitration to Recover $84M in Delinquent Debt
The trading platform is also in discussions with depositors looking to help the company by ‘rolling some of their deposits into equity’.
Crypto trading platform CoinFLEX has begun arbitration for the recovery of over $84 million in debt owed by a “large individual customer” as part of its broader revival strategy.
CoinFLEX said “We have commenced arbitration in HKIAC (Hong Kong International Arbitration Centre) for the recovery of this $84 million as the individual had a legal obligation under the agreement to pay and has refused to do so,” in their post on Saturday. “His liability to pay is a personal liability, which means the individual is personally liable to pay the total amount, so our lawyers are very confident that we can enforce the award against him.”
CoinFLEX suspended withdrawals last month after one of its customers experienced an account deficit during June’s market volatility. The individual was revealed to be Roger Ver, a prominent crypto investor and CoinFLEX CEO Mark Lamb’s former business partner. Ver denied the claim on social media.
CoinFLEX said on Saturday that it is holding more than 26 million FLEX tokens in its inventory, valued at over $7 million at the current price. It also said that if trades resume, this would cause volatility in FLEX’s rate and adversely affect users’ collateral positions.
The company announced it’s looking to raise a significant amount of funds from investors, including through customer deposits in exchange for equity.
The bank then said, “there are a number of investors in this group of large depositors who have indicated that they may be in a position to help the business move forward if we can all find a workable solution.”
Although CoinFLEX’s recovery of the debt may help prevent a steep price drop, “we believe the recovery of the debt will help build confidence in and will help shore up the trading price of FLEX Coin,” it said.
CoinFLEX has been steadily losing tokens in the past 30 days. The latest drop came on June 30th, when FLEX fell from $4.20 to $1.60. A lack of swift recovery plan has been adding to their problems and the token is now down 94% from its launch price of $2.00 in March.
CoinFLEX said that it hopes to make 10% of customers’ balances available for withdrawal in the next week, adding that the adjudication process could “take up to 12 months.”